One chipmaker is finally reaping the benefits of Nvidia’s AI chip boom

• Micron surged over 15% after strong revenue and profit forecasts driven by AI spending.
• The chipmaker’s Q4 revenue hit $7.75 billion, nearly double last year’s fourth-quarter performance.
• Other chip stocks also rallied on Thursday after Micron’s revenue guidance.

Micron surged over 15% on Thursday after reporting strong revenue and profit forecasts, spurred by continued artificial intelligence spending.

The US chipmaker’s revenue in the quarter that ended August 29 was $7.75 billion, nearly double of what it saw during the same time last year. It came as a result of strong demand and pricing for its high-bandwidth memory chips.

“We are entering fiscal 2025 with the best competitive positioning in Micron’s history,” Micron’s CEO Sanjay Mehrotra said in an earnings call on Wednesday. “With the advent of AI, we are in the most exciting period that I have seen for memory and storage in my career.”

He added that the company forecasts record revenue in the last three months of 2024. Micron projected its next quarter’s revenues to be between $8.5 billion and $8.9 billion, above the $8.3 billion analysts anticipated.

The chipmaker’s rosy forecast is a sign that it is another winner of the AI spending boom. But that wasn’t always the case — the company reported five consecutive quarters of losses from September 2022 to November 2023, while customers like Nvidia profited on the AI wave.

At the time, Micron was struggling with poor demand from the smartphone and personal computer markets — which led to an oversupply, hurting its bottom line.

Micron is the first chipmaker to report earnings this quarter. Its outlook was expected to spread optimism about the overall industry among investors, Wedbush analysts led by Matt Bryson wrote in a note Thursday.

“We expect MU’s upbeat outlook will be seen as positive for the memory complex and particularly Hynix given its lead in HBM,” Wedbush’s analysts wrote.

Micron’s Asian rivals, Samsung Electronics and SK Hynix, who also supply to Nvidia, saw their shares rise by 4% and 9%, respectively, in South Korea on Thursday.

Japanese semiconductor maker Tokyo Electron was up over 6% on Friday.